Bizum stands as one of the most used instant payment apps in Spain. The system emerged as a competitor to PayPal in 2016, born from the collaboration of multiple banks, and today it is used by more than 10 million people. It is especially popular among young people for splitting bills when dining out.
This system moves millions of euros every year, which is why tax authorities have stepped in to ensure transfers are free from illicit activity. Like any money movement, it requires oversight from the administration to determine legality. If standards aren’t met, penalties can be imposed and fines required.
Who hasn’t heard someone say, I will Send you a Bizum
Tis important to know that the minimum amount to send is 50 cents, and the maximum is 1,000 euros, with a monthly cap of 5,000 euros. This is where issues can arise, because under the General Tax Law banks are obligated to provide the tax administration with any data, reports, records, and documents related to tax compliance or derived from economic, professional, or financial relationships with others.
In practice, this happens rarely in Bizum, but if a user transfers more than 10,000 euros across different accounts, such movements must be explained in the annual income tax return.
If the procedures of the tax model are not followed, those involved face penalties ranging from 600 euros to 50 percent of the amount sent. In cases where the source of the funds is unclear or the offense is greater, sanctions can start at 60,000 euros for minor offenses and rise to 150,000 euros for the most serious ones.